Japan’s Nikkei share average concluded the trading session on Friday with a decline exceeding 2%, driven by a significant drop in the shares of Google parent Alphabet, which raised apprehensions regarding substantial expenditures in artificial intelligence. The Nikkei fell 2.73% to close at 64,611.15, yet managed to rise 0.7% for the week following a 6.4% decline in the prior week. The broader Topix slipped 1.05% to 4,011.31.

The Nikkei has experienced a decline of nearly 8% thus far this month, entering correction territory last week. Its moves have been heavily influenced by the tech-heavy South Korean benchmark and the U.S. Philadelphia semiconductor index. Shares of Alphabet sank 7% overnight after the company reported higher spending plans while it also burnt cash. Wall Street indexes closed lower, with the Nasdaq shedding more than 2%. Concerns have reemerged regarding the sustainability of substantial investments in AI infrastructure following a significant decline in Alphabet’s shares, according to Kazuaki Shimada.

The index has been affected by overseas factors, not local cues. “The (Nikkei) index has been affected by ‌overseas ⁠factors, not local cues. Many Japanese companies will start reporting their earnings from today, and if their outlook is strong, the index’s trend may change,” said Shimada. Chip-related shares experienced a decline, with Advantest losing 6.02% and Tokyo Electron decreasing by 4.99%, respectively. Technology investor SoftBank Group fell 7.06%, while memory chip maker Kioxia lost 9.49%.

Shares supported by domestic demand rose, with East Japan Railway and West Japan Railway rising nearly 2% each. Central Japan Railway, which runs bullet trains between Tokyo and Osaka, rose 1.62%. Otsuka Holdings, a maker of Pocari Sweat, climbed 2.2% to become the top percentage gainer on the Nikkei. Among the over 1,500 stocks listed on the prime market of the Tokyo Stock Exchange, 40% experienced an increase, 56% saw a decline, and 3% remained unchanged.